Premier Inn to expand in India as low-cost airlines grow

The India division is planning to open hotels in Goa and Chennai in the coming year.

Premier Inn is expanding in India. Courtesy Premier Inn Hotels
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The hotel chain Premier Inn is expanding in India to meet the demand for budget hotels amid a growing middle class and the rise of low-cost airlines in the country.

There are three existing properties in India under the Premier Inn brand, which is part of the hospitality group Whitbread and is the largest budget hotel chain in the UK. The India division is planning to open hotels in Goa and Chennai in the coming year, according to VV Giri, the regional director of operations for Premier Inn South Asia.

“Going forward, we strive to close seven to eight deals every year, which should result in four to five fully operational properties every year,” Mr Giri said, adding that it had already invested US$350 million in the Indian market.

“So far we have narrowed down on about 30 potential markets where we wish to set up our properties,” he added. “The relative underdevelopment of the budget hotel sector in India coupled with the pace of economic growth has created an opportunity for Premier Inn India to create a pan-Indian business, which has ambitious plans for setting up hotels. Our expansion plans are quite realistic considering the development process in India is quite difficult and time-consuming. There are various kinds of challenges surrounding acquisitions, licenses, real estate, approvals, supply chain and human resources.”

The growth of low-cost carriers in India would help feed business to the hotels, he said.

“There is a gradual increase in the number of domestic tourists every year,” Mr Giri said. “India’s rapidly expanding middle class, increasing buying power and growing infrastructure make it a lucrative inbound and outbound tourism destination. Midsized hotels depend on domestic travellers, a segment that is showing a significant increase in spending on travel and vacations.”

He said occupancy levels at the company’s hotels in India were “decent” at between 60 and 70 per cent.

Premier Inn in 2010 bought out its joint-venture partner in India, Emaar MGF, a property developer that is a joint venture between Dubai’s Emaar Properties and MGF Development of India.

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